Ariel Sharon announced an unqualified end to all Israeli military attacks on the Palestinians yesterday as part of a historic ceasefire that formally ends more than four years of brutal intifada, suicide bombings and the destruction ofoccupied towns.

Mr Sharon and the new Palestinian leader, Mahmoud Abbas, offered separate but inextricably linked declarations of an end to violence at a summit in the Egyptian resort of Sharm el-Sheikh. The declarations open the way for Hamas and its allies to make permanent an interim truce and announce an end to their war on Israel.

Although Israel shied away from calling the deal a ceasefire, preferring to describe it as an "understanding", Mr Sharon went further than had been expected, declaring a total end to military action under pressure from the US and Arab neighbours not to undermine Mr Abbas's efforts to end the conflict that has claimed more than 4,500 lives.

"We agreed that all Palestinians will stop all acts of violence against all Israelis everywhere and in parallel, Israel will cease all its military activity against all Palestinians anywhere," Mr Sharon said. "We have an opportunity to disengage from the path of blood which has been forced on us ... For the first time in a long time, there exists in our region hope for a better future for our children and grandchildren."

He said Israel would transfer security control of West Bank cities to the Palestinians and implement other "confidence building" measures including the release of hundreds of prisoners.

Hamas and Islamic Jihad in the Gaza Strip sounded a warning by saying they would have to talk to Mr Abbas before deciding whether the Israeli declaration met their demands for guarantees of a comprehensive ceasefire. But as the Israeli prime minister went further than expected, Palestinian officials said the armed Islamist groups had no grounds for backing away from their agreement with Mr Abbas to end their armed struggle and enter the political process.

Mr Abbas described the Israeli and Palestinian declarations at the summit, hosted by the Egyptian president, Hosni Mubarak, as "the beginning of a new era of peace and security.

"It is a basic step which has its own momentum in bringing peace and stability and trust between two peoples," Mr Abbas said.

"We are committed to the peace process. The time has come for the Palestinian peo ple to achieve the independence of our people, to enjoy peace. Dialogue will replace weapons and shells."

But Mr Sharon rebuffed the Palestinian leadership's calls for a swift return to political negotiations by saying the two sides "must move forward cautiously".

A senior Israeli foreign ministry official, Gideon Meir, said the ceasefire would only evolve into a political process if Mr Abbas removed the threat of a resumption of violence by disarming Hamas and its allies, a move the Islamist groups say would be provocative.

"The short-term will be a ceasefire in fact. But Israel cannot see a ceasefire as a long-term arrangement because Israelis will see a threat of violence always hanging over their heads," Mr Meir said.

Mr Sharon said he would press on with his unilateral "disengagement plan" to pull all Jewish settlers out of the Gaza Strip and only after that consider returning to the US-led "road map" to the creation of a Palestinian state.

He also sought to dispel a widespread suspicion of his intent among ordinary Palestinians: "To our Palestinian neighbours, I assure you that we have a genuine intention to respect your right to live independently and in dignity," he said.

Mr Sharon's office said Mr Abbas had accepted an invitation to a meeting at Mr Sharon's ranch in Israel. Mr Sharon also said he would like the next meeting between the two leaders to be in the West Bank town of Ramallah.

Jack Straw, the foreign secretary, said there was "guarded optimism" over the declarations: "There have been more tears than smiles but I sense there is a commitment from Abbas and Sharon, a new determination to make a reality of the goal of two states living side by side."